MoneySmart lists Debt Consolidation Plan products that range between a minimum of 1 to a maximum of 10 years. The effective interest rate (EIR) of loan products on our site range from 7.70% p.a. to up to 11.08% p.a. The EIR of your loan will be dependent on the loan you apply for as well as your personal financial needs.

For example, you would need to pay S$311/month for a S$10,000 Debt Consolidation Plan with a loan tenure of 3 years at 3.98%pa Interest Rate (7.70% EIR). This would equate to a total payment of S$11,393 over 3 years. Please view each Debt Consolidation Plan product in detail for a full breakdown of the interest rate chargeable, minimum and maximum loan tenure as well as processing fees (if applicable).

Frequently Asked Questions

What is a debt consolidation plan?

A debt consolidation plan combines all your unsecured debts (such as multiple credit card bills) into one big loan with just one bank or financial institution. The bank clears your outstanding credit cards and accounts so that you can concentrate on repaying the DCP loan. Since DCP interest rates are typically much lower than that of credit cards, it is easier to repay.

Who can apply for a debt consolidation plan?

Only Singapore citizens and PRs are eligible for a debt consolidation plan. You need to earn between $20,000 and $120,000 per year, and your net personal assets (all your assets, minus any liabilities) should be valued at less than $2 million. On top of these, the bank offering the DCP loan may have further requirements while assessing your eligibility.

What kinds of debt can’t be consolidated under DCP?

Debt consolidation plans are for unsecured credit, so it excludes secured loans like car or housing loans. If you took out a loan for a specific purpose, such as a renovation, education, medical or business loan, it also cannot be consolidated under DCP. Your total debts need to be more than 12 times your monthly income in order for you to qualify for a DCP loan. (Although, if it’s less than that, you can still take out a personal loan to consolidate your debt.)

How much will you owe the bank under a debt consolidation plan?

On top of adding up your outstanding bills + interest, the bank will also add up to 5% on top of that for your first DCP loan. That’s because in the time it takes to pay off those credit card bills on your behalf, your old credit accounts might have accrued even more interest and/or fees. The 5% serves as a buffer for this purpose, and the excess will be refunded.

What else should you be aware of?

If your outstanding bills are very high, there’s a chance that your approved DCP loan amount is not enough to cover all your debts. In this case, you’ll have to settle the shortfall directly with the credit card issuer, otherwise, your debts will not be cleared. Also, it’s possible to refinance your debt consolidation plan if you find a better one out there. You need to notify your bank and obtain a settlement notice before you transfer.